As ethanol output continued to hit record highs, ethanol prices in the United States fell approximately during the first two weeks of the month of December 2025 because of abundant supplies entering the marketplace. This was confirmed by the US Energy Information Administration who reported that US ethanol production had increased more than 2% in mid-December 2025 which also set another record for one weekly volume for production and was greater than the previous week and same week the previous year. While domestic ethanol stocks were lower slightly and exports saw large gains on a weekly basis, there were enough excess supplies in the market to hold prices lower than they otherwise would have been. Ethanol blend demand continued to show improvement on a week-over-week basis, though it was still below year-ago levels. Finally, looking ahead into next year 2026, US EIA's forecast for ethanol production and exports for 2026 were projecting continued downward price pressure on ethanol due to increased quantities of both being added into the marketplace.
The price of ethanol in the United States decreased in the first half of December 2025, due to the combined impact of record amounts of production, conveniently high stocks available to be purchased, and changes in purchasing patterns from consumers. The recent decrease in prices is indicative that the tight supply is easing on a national basis; even though there were times when both exports and blending activities had some strength. Ethanol industry participants interpreted the falling prices as primarily resulting from supply-side issues, because of the good levels at which ethanol producers are operating and the slow increase in the demand for ethanol.
The US Energy Information Administration reported that fuel ethanol production sharply increased in mid-December and set a new weekly production record, as production increased over 2% compared to last week’s records and set a new weekly record for the agency. For the last year, production increased from last year as well, indicating that the US ethanol plants continue to produce at high levels despite the decrease in prices.
In conjunction with production rates, EIA's report indicated that there was some relief from the oversupply worries. For example, during this week, US Ethanol stocks had decreased slightly from last week as well as from last year at approximately one per cent decrease week over week. Regionally, the largest weekly draw in stock levels occurred in the Midwest while a minor increase occurred on the East Coast. Overall, the decline in stocks provided additional support to prices while production levels remained high.
Another opposing factor was exports according to the EIA; that ethanol exports reached near record levels at mid-December with an increase of more than 50% over the previous week. The EIA also stated that there were no ethanol imports for that same week, thus supporting the US ethanol export balance. Despite this, the market response was subdued as the market remained focused on continued exceptional production levels rather than peaks associated with short-term trade activity.
According to EIA estimates, ethanol blending activity on the demand side increased from the previous week with increases noted throughout all major regions. Despite this increased activity, blending volumes are currently just slightly less than the same week last year, indicating that domestic consumption had not kept up with the increase in supply.
Ethanol production remains strong, according to the EIA's Short-Term Energy Outlook. The agency has increased its production forecast for 2026, raising the average output to above what was previously projected and increasing its net export outlook. Ethanol consumption is expected to be stable until 2026. The outlook indicates that even though there are weakening near-term prices in early December, the market's long-term fundamentals continue to provide broad support, and it will gradually return to balance as demand and trade adjust to continued strong production levels.
